Investors are worried Bill Ackman’s SPAC is struggling to find an acquisition target

FILE PHOTO: Bill Ackman, chief executive officer and portfolio manager at Pershing Square Capital Management, speaks during the SALT conference in Las Vegas, Nevada, U.S. May 18, 2017.  REUTERS/Richard Brian
Bill Ackman, chief executive officer and portfolio manager at Pershing Square Capital Management, speaks during the SALT conference in Las Vegas

  • Investors are getting anxious about billionaire hedge fund manager Bill Ackman finding a target for his SPAC to take public, Institutional Investor reported.
  • Ackman says a deal has been in the works since November, and that the SPAC team has done its homework.
  • Even so, if he can’t get the transaction done, Ackman said his SPAC will move on to another target.
  • See more stories on Insider’s business page.

Investors are starting to worry Bill Ackman’s blank-check company is struggling to find an acquisition target, Institutional Investor reported this week.

The billionaire hedge fund manager told investors on a Wednesday call that he will make an announcement whether his Pershing Square Tontine Holdings SPAC gets a deal done with the current target or has to move on.

The uncertaintly is making retail investors anxious. The story from Institutional Investor found sentiment was low on a “PTSH support group” page comprised of retail traders. One told the magazine that it “seems like the deal won’t happen” as Ackman keeps mentioning the idea of a backup target.

His SPAC – which launched with the goal of spending $5 billion to take a private business public – started working on a transaction in early November.

“We’ve done our homework, we like the business, we love the management team, and we are working to complete a transaction, as I said within weeks,” he said on the call, according to a transcript from Seeking Alpha.

“If we cannot get this transaction done, we will move on to target number two, and there are other interesting opportunities for us to pursue,” he added.

Following Ackman’s comments, shares of Tontine, which went public in July 2020 under the ticker PTSH, declined, closing out the day 1.2% lower.

According to a Monday filing with the Securities and Exchange commission, Tontine said it’s “currently in negotiations with a specific business target and while substantial progress has been made, significant issues remain to be addressed before a transaction can be announced and consummated, if at all.”

Several institutional investors have sold all or some of their positions in the SPAC, though its early backers are still in place. Hedge Fund Soroban Capital sold its stake of 5 million shares, Taconic Capital sold half of its 1.1 million shares, and the Ontario Teachers Pension Plan sold 4.3 million shares, though that was only part of its investment, Institutional Investor reported.

But early backers Guggenheim Capital and Baupost Group still hold tens of millions of shares in Ackman’s SPAC.

On The Wall Street Journal’s “The Future of Everything Festival,” Ackman said he and his team found an “iconic, phenomenal, great business with a great management team that meets all of our criteria.” But, the nature of the target, the complexity of the deal, and other issues have caused delays, he said, adding that the company is so attractive it will be “worth the energy and the effort.”

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Elon Musk’s brother sold Tesla shares worth $25.6 million after an upward streak in the electric-car maker’s stock

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Kimbal Musk.

  • Kimbal Musk, a Tesla board member, sold $25.6 million shares in the electric-car maker this week.
  • Elon Musk’s younger brother still holds nearly 600,000 shares in the company, worth about $483 million.
  • Board member Antonio Gracias also sold 150,747 Tesla shares, but replaced them with call options.
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Kimbal Musk, billionaire Elon Musk’s younger brother, sold Tesla shares worth $25.6 million shares on Tuesday, according to filings registered with the Securities and Exchange Commission. 

He sold 30,000 directly owned shares at an average price of $853 per share, the filings showed. The 48-year-old, who is a Tesla board member and restaurateur, still holds 599,740 shares in the company, worth roughly $483 million.

Tesla’s shares rose 743% in 2020 and are up about 14% so far in 2021.

Read More: BANK OF AMERICA: Buy these 7 online-retail stocks that are ‘structural winners’ set to build on strong 2020 gains – including one with 41% upside

Screenshot 2021 02 11 at 08.35.19

Separately, Tesla audit committee member Antonio Gracias sold 150,747 shares in the electric-car maker at an average price of $845.36 on Tuesday, according to another filing. But Gracias replaced these positions by purchasing 150,747 call options that expire in June 2022 and 2025, with exercise prices of $52.38 and $68.56. Gracias, a board member who also serves as the chairman and CEO of Valor Equity Partners, owns 1.3 million shares in Tesla via the AJG Growth Fund, the filing showed.

Tesla executives and insiders hold about a 19.6% stake in the company, according to Bloomberg

Read More: BlackRock says investors haven’t fully priced in the structural changes brought about by the pandemic – and pinpoints 2 areas of the market that can still run for years

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Virgin Galactic slides 6% as investors look to sell 113 million shares

spaceshiptwo unity first free flight new mexico spaceport america runway landing virgin galactic may 2020
Virgin Galactic’s SpaceShipTwo “Unity” lands on a runway at Spaceport America in New Mexico on May 1, 2020.

  • Virgin Galactic fell as much as 6% on Friday after shareholders filed to sell up to 113 million shares.
  • Shareholders aim to sell up to roughly 105 million outstanding shares of common stock and up to 8 million shares of common stock issuable upon the exercise of warrants, according to a Securities and Exchange Commission filing published Thursday.
  • The filing doesn’t specify when the selling could begin.
  • The filing comes as shares sit roughly 120% higher year-to-date.
  • Watch Virgin Galactic trade live here.

Virgin Galactic tumbled as much as 6% on Friday after shareholders moved to sell up to 113 million shares.

In a Securities and Exchange Commission filing published Thursday, stockholders announced efforts to resell up to about 105 million outstanding shares of common stock and up to 8 million shares of common stock issuable upon the exercise of warrants. Virgin Galactic won’t receive any of the proceeds from the sale. The filing doesn’t specify when the selling could begin.

The resale efforts come as Virgin Galactic shares sit about 120% higher year-to-date. 

Read more: 3 ETF executives break down the various ways to invest early in the global 5G boom as it grows to unlock $13.2 trillion in value by 2035

Shares recently weathered stronger volatility as the company prepares for its first manned test flight out of Spaceport America in New Mexico. The stock rallied to a 9-month high on December 7 as investors bet on a successful test, but rocket engine issues postponed the flight and dragged shares as much as 17% lower on December 14.

“Virgin Galactic is now conducting post-flight analysis and can so far report that the onboard computer which monitors the propulsion system lost connection, triggering a fail-safe scenario that intentionally halted ignition of the rocket motor,” the company said in a statement.

It’s unclear when the test flight will be rescheduled. The initial plans to hold the test in November were already delayed once after rising COVID-19 cases in New Mexico squandered launch efforts.

Virgin Galactic closed at $25.50 on Thursday. The company has five “buy” ratings and four “hold” ratings from analysts, with a consensus price target of $24.56.

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